November10,2018

As Washington continues to dissect the results of Tuesday’s midterm elections, which saw the House of Representatives return to Democratic power for the first time in eight years, Irish eyes in the US capital are focused on another matter.

The next two months – known as the “lame-duck” session as the current Congress sits out its final weeks – offers the best opportunity in some time to secure a visa deal for Irish citizens.

Behind the scenes discussions are under way to clinch an agreement that would see the E3 visa scheme, which only applies to Australians, extended to Irish citizens.

Australia, an important military ally of the US, secured the coveted visa programme in 2005 as part of a US-Australia trade deal. It was widely seen as a thank you by the US to Australia for its participation in Iraq and Afghanistan.

More than a decade later, Australians are not taking up the full allocation of 10,500 visas offered each year. Ireland senses an opportunity.

In the final days of the last congressional session before members returned to their districts for the midterms, two members of Congress – Republican Jim Sensenbrenner and Democrat Richard Neal – introduced a Bill to the house. A vote could take place as early as this week when members of Congress reconvene on Capitol Hill.

John Deasy, the US special envoy who has been working on the proposal with the Department of Foreign Affairs in Washington and Ireland’s senator for the diaspora Billy Lawless, says that the Bill will be dealt with under a procedure known as “Suspension of the Rules” which allows the House to process non-contentious measures swiftly.

Many obstacles

“The E3 bill as drafted is being viewed as a non-contentious measure by both Democrats and Republicans,” he says. “Having two long-serving and respected members of Congress from different sides of the aisle introduce it jointly bears that out.”

But there are many obstacles to a deal. Firstly, any Bill must be endorsed by the Senate and needs unanimous approval.

Secondly, there is the question of the undocumented Irish. The Bill in its current form relates to future flows of Irish people who want to live and work in the United States, but sources say there could be room for negotiation on the issue further down the line.

Ciaran Staunton of the Irish Lobby for Immigration Reform says he is waiting to see details of the Bill. “While any new visa is welcome, and we support any opportunity for Irish people to live and work in the United States, we would hope that there is something for the undocumented on this,” he says.

Diplomats are also sounding caution. Ireland has seen similar initiatives brought forward before, only to be thwarted at the last moment.

The Senate passed a comprehensive immigration reform Bill in 2013 but it failed in the House. Similarly, a 2015 proposal on extending the E3 visa to Ireland did not secure enough congressional support. This time, officials are also working on a proposal to make it easier for American retirees to move to Ireland, by lowering the income threshold required and permitting Americans to work for up to 20 hours a week.

Economic links

Whatever happens in the coming weeks, the quest for a new visa programme for Irish citizens should continue. The visa, which is seen as an alternative to the H-1B visa, is a two-year renewable visa which covers spouses. It is also less costly to secure than the H-1B professional visa. Up to 5,000 visas a year could be made available to Irish citizens.

With the number of Irish people choosing to live and work in the United States on a steady decline for years, securing new emigration paths is crucial if Ireland wants to continue the deep cultural and economic links between Ireland and America.

Next week the heads of Ireland’s diplomatic missions across North Americawill gather in Washington. The annual gathering comes after the Cabinet in Dublin was briefed last week on the new Ireland-US strategy, part of the Government’s effort to double Ireland’s global footprint by 2025.

Among the proposals are to invite more American politicians to visit Ireland, and step up engagement with contacts on Capitol Hill – a strategy being pursued by the embassy in Washington for many years.

Given that the United States is Ireland’s number one trading partner outside the EU, nurturing the Irish-US relationship should be a key diplomatic priority in the years ahead.

November10,2018

America is full of people of Irish descent. Why is it so hard to move there?

Indeed. More than 35 million Americans claim Irish heritage, but since the mid-1960s, we have had little special treatment when it comes to applying for visas to live in the US. Ireland has long argued that the number of visas allocated to Irish citizens in America should better reflect the strong historic link between the two countries.

What’s on the table?

Massachusetts Democrat Richard Neal and Wisconsin Republican Jim Sensenbrenner introduced a bill to Congress earlier this month, proposing Irish citizens become eligible for the E3 visa programme, currently limited to Australians. This Wednesday the House of Representatives voted in favour of the bill during a debate in Congress, but it still must secure Senate approval.

What is an E3 visa, and why are Australians the only ones eligible?

Australia clinched a deal for its citizens as part of a trade agreement back in 2005, allowing them to apply for a renewable E3 visa to work in the US for two years. The scheme is capped at 10,500 visas annually, but currently, only about half are taken up every year; if this bill passes, Irish citizens would be eligible for the unused quota, amounting to about 5,000 every year.

Who will qualify?

To apply for an E3, you must have third-level qualification or 12 years managerial experience, and a job offer from a registered employer.

Is this a deal for the undocumented Irish too?

As it stands the Bill only applies to future flows of Irish people rather than undocumented Irish living in the United States.

Why now?

Ireland has been pitching for inclusion in the E3 scheme for years; it came close in 2015, but the bill failed to secure enough support in Congress. This time it has the backing of House Speaker Paul Ryan, and president Donald Trump has also indicated his support for a deal for the Irish.

Is Trump not against immigration?

At the White House this St Patrick’s Day, Trump made “fast friends” with Taoiseach Leo Varadkar, referring to Ireland as a “wonderful country” and signalling his support for a deal for the undocumented Irish. The Irish delegation explained to the president that there were only about 10,000 Irish people now thought to be living illegally in the US, a figure much lower than the 50,000 usually cited, which possibly made a special deal for the Irish more politically palatable.

What has Ireland offered in return?

In exchange, Ireland would ease the requirements for Americans who want to retire in Ireland. At the moment, all non-EEA citizens looking to retire here need to have an annual income of at least €50,000, and are not permitted to work. Income thresholds may be lowered for American citizens, and permission given for them to work 20 hours per week.

How likely is the bill to pass?

The bill has passed through the House of Representatives, but it still must secure unanimous consent in the Senate, which will require agreement of all 100 Senators. Speaking on Capitol Hill on Wednesday, the Irish Government’s special envoy to the US Congress John Deasy he was "under no illusions how difficult that may be”.

Immigration reform campaigners say they are “cautiously optimistic”. Chicago-based Senator Billy Lawless, appointed by former Taoiseach Enda Kenny to represent the Irish diaspora, says “it is the best chance at immigration reform that we have had in 20 years”.

If this doesn’t pass, what are my options if I want to move to America?

Aside from the popular J-1 visa programme for students and recent graduates, Irish citizens only have three main options: to marry an American citizen, get an employer to sponsor them for a H1B visa (which lasts just six years), or chance their luck in the annual Diversity Visa Lottery for a green card, but only about 160 Irish win a green card this way every year.

November9,2018

The Supreme Court’s October decision in South Dakota v. Wayfair upended decades of established precedent governing state taxation of business. Prior to the ruling in Wayfair, states could only tax businesses that had a “physical presence” within their borders. The court’s decision in the Wayfair case to abrogate the physical presence standard threw all the cards up in the air. While the Supreme Court was unwise to decide as it did in Wayfair, Congress would be wise to step in and lend some semblance of order to the transition.

No sooner had the Wayfair decision been released that states began scrambling to get a piece of the tax pie. Unfortunately, in their haste to draw in as much revenue as possible, states have often made proper procedure and due diligence a secondary concern. Some states, such as Michigan and North Carolina, have not even bothered to draft specific legislation in response to Wayfair, simply relying on administrative action. In total, at least 13 states have announced internet sales taxes without drafting updated legislation.

Such hasty scrambling to access revenue is ill-advised not only for procedural reasons, but also because of the uncertain environment it creates for business. Wayfair has created chaos already, forcing small online retailers previously exposed to one or two tax jurisdictions to face the prospect of complying with as many as 12,000 tax jurisdictions nationwide. Thomson Reuters is estimating that a mere 8 percent of mid-sized businesses are prepared to handle the added compliance burden. Smaller businesses are undoubtedly even less prepared, and vague guidance from tax collection agencies only further blurs the picture.

A bipartisan group of lawmakers in Congress led by Rep. Jim Sensenbrenner (R-Wis.) is working on legislation to address these problems. Rep. Sensenbrenner’s legislation, the Online Sales Simplicity and Small Business Relief Act, would impose a moratorium on enforcement of post-Wayfair state tax laws until at least January 1. By removing the time crunch states are reacting to, Congress would effectively encourage them to take the time to draft proper, well-considered laws.

This Sensenbrenner bill would also prevent states from collecting taxes retroactively. Despite the fact that the Wayfair decision suggested that retroactive collection may be unconstitutional, states like Florida and Massachusetts have already indicated that they are exploring the concept. Retroactive collection, where states collect taxes from before the Wayfair decision even came out, is not only deeply unfair, it is also bad policy. Businesses, particularly small businesses, operate on thin margins — throwing unexpected taxes at them without giving them time to prepare can be catastrophic, not to mention potentially unconstitutional.

Another area where states have been misbehaving is in establishing protections for small sellers. The Supreme Court effectively blessed South Dakota’s rule exempting online businesses with less than 200 sales and less than $100,000 in revenue from within the state. Pennsylvania, Oklahoma and Washington each impose tax obligations starting at just $10,000 in sales — an amount that many truly small businesses would easily exceed. Even a higher $100,000 standard is low when applied to states with economies vastly larger than South Dakota’s, such as New Jersey, but that hasn’t stopped states from pushing the boundaries.

To solve this, Sensenbrenner’s legislation would set a small-seller exception at $10 million in revenue nationwide. The Small Business Administration defines revenue up to $38.5 millionas a “small business” in this sector. That number may seem high, but keep in mind that revenue is not profit — it is the amount of total income for a business before operating expenses. A $10 million threshold would protect most truly small businesses from being forced to comply with the dizzying array of tax laws nationwide.

Small businesses have it hard it enough without having to cope with a sudden shifting of tax rules. Congress must step in and prevent overzealous state tax bureaucrats from causing even more harm, and Sensenbrenner’s legislation is a good start along the road to making sure businesses are treated fairly after the chaos that the Supreme Court has caused.

November9,2018

Support from senior figures in the Trump administration has been instrumental in progressing efforts to secure a landmark visa deal between Ireland and the US, the Government’s special envoy to the US has said.

John Deasy, the Waterford TD appointed by Taoiseach Leo Varadkar to spearhead efforts at visa reform, said senior figures in President Donald Trump’s cabinet helped to draft a Bill that could be voted on in the House of Representatives as soon as next week.

Mr Deasy cautioned that the Bill still had to be passed in the House of Representatives and the Senate, where it will need unanimous backing. He stressed, however, that it had bipartisan support from Democrats and Republicans.

“We are not there yet and I think we need to focus on just getting this done,” he told The Irish Times. “There are a million ways on Capitol Hill how a whole Bill can be stopped.”

Under the proposed legislation Irish citizens would become eligible for the E3 visa – a visa currently open only to Australian citizens. About 10,500 E3 visas are available each year, but only about half are taken up. In the mooted move, Irish citizens would be eligible to apply for any visas not used in the allocation.

Strong supporters

The Bill containing the proposal is being sponsored by Republican Jim Sensenbrenner and Democrat Richard Neal, and Mr Deasy said Mick Mulvaney and John Kelly, respectively Mr Trump’s director of office of management and budget, and his chief of staff, have been strong supporters of the legislation.

As a result, Mr Deasy said the latest initiative has made immigration reform for Ireland “closer than its ever been”.

“Frankly, because it has been drafted by the current administration, Homeland Security, with two members of congress on either side. That is something that hasn’t occurred previously.”

Niall O’Dowd, a long-time campaigner for immigration reform, welcomed the latest developments but also struck a note of caution. Mr O’Dowd also said he will be watching to see if the Bill addressed the issue of the undocumented Irish in the US.

“It is a positive development, it is an exciting development, but one that still has a way to go. I do believe that the Taoiseach and President Trump have spoken about this issue and it has got traction within the Trump administration.”

When asked about how the undocumented will be catered for, Mr Deasy said the “priority right now is to ensure that this legislation passes”.

“That is the most important part of this process and I hope people would just bear with me throughout the entire process.”

Income thresholds

He said the success of the latest plan rested on “making a proposal that makes sense to the Americans”. In return for access to the E3 programme, Ireland would make it easier for US citizens to retire here by lowering income thresholds for those who wish to retire here, as well as allowing such applicants work 20 hours a week.

“From our end if we get the the E3 visas, at the same time create the flows from the American side, it’s a win-win and it really benefits both countries,” Mr Deasy – who has in the past worked as a legislative aide and a lobbyist on Capitol Hill – said.

Getting a new Bill to this point, he said, was due to upping the “political ante” with individual members of congress.

“The only way we were going to achieve a deal in Washington was by increased political activity at member level.

“No disrespect to our Department of Foreign Affairs but I think that was necessary and I think that has proven to actually have an effect over the last year, year and a half.”

November8,2018

A renewed effort to secure two year renewable E-3 visas for the Irish could be heading to Congress during its post-election lame duck session.

A bill, jointly sponsored by Congressman Richard Neal, the Massachusetts Democrat and chairman of the congressional Friends of Ireland, and Congressman James Sensenbrenner, a Republican from Wisconsin, is now before the House of Representatives.

A version of it has existed for several years.

Back in in November, 2015, H.R. 3730, proposed allocation to Ireland of E-3 visas not taken up by Australians who enjoy a dedicated annual E-3 allocation.

The bill was placed before the House by Rep. Sensenbrenner and was taken up by the Judiciary Committee. No action was taken at the time.

Action might now be taken.

The Irish Times was reporting that the Irish government was “close to a landmark visa deal with the U.S. which could allow thousands of Irish people to live and work there.”

The Times reported that “a vote could take place on the House floor as early as next week when Congress reconvenes after the midterm elections, though the Bill must ultimately gain Senate support also, where it needs unanimous consent.”

Any House standalone bill would have to find itself a Senate match.

H.R. 3730, according to its language, was intended “to authorize unused visas numbers made available under section 101(a)(15)(E)(iii) of the Immigration and Nationality Act to be made available to nationals of Ireland, and for other purposes.”

It additionally states: “Notwithstanding any other provision of law, visa numbers made available….that were unused by nationals of the Commonwealth of Australia during a fiscal year shall be made available on the same basis in the subsequent fiscal year to nationals of Ireland residing in that country.”

As such, that E-3 proposal does not address the circumstances of the many thousands of undocumented Irish living in the United States.

H.R. 3730 required of possible future Irish applicants that they would have at least a high school education or its equivalent, (which shall include passage of a high school equivalency examination) or have, “within five years, at least two years of work experience in an occupation classified as Zone 2 or higher by the Bureau of Labor Statistics if the alien is a national of the Republic of Ireland.”

It’s unclear at time of writing if the Neal/Sensenbrenner proposal will deviate in any significant way from H.R. 3730, or if it is a carbon copy.

That said, the Irish Times reported that “one key difference this time, according to officials, is the involvement of House Speaker Paul Ryan. Ireland is also offering a reciprocal arrangement to America which will see the Department of Justice ease the requirements for Americans who want to retire in Ireland.”

What’s yet unclear is how the Australians will react.

The Australian E-3 visas allow citizens of that country, and their spouses, to live and work in the U.S. for two years while additionally allowing for the possibility of a renewal.

The visa allocation was included in a trade deal between the U.S. and Australia but was widely seen as a reward for Australia for its help in the Iraq war.

As such, it was a quid pro quo deal. Any deal between Dublin and Washington would also have a quid pro component given the retirement aspects. U.S. citizens retiring to Ireland can draw their Social Security payments there as a treaty between the two countries allowing for this has existed for some year.

Reported the Irish Times regarding possible E-3s: “Applicants must have a job in the United States to quality and have certain academic or other qualifying credentials. But the E3 is significantly easier and less costly to obtain that the tradition H1B visa.”

The reemergence of a possible E-3 allocation comes against the backdrop of negotiations between Dublin and Washington that have included discussions between Taoiseach Leo Varadkar and President Donald Trump – on St. Patrick’s Day in the White House – and John Deasy, a member of Mr. Varadkar’s Fine Gael party who has been acting as a de facto envoy to the U.S. Congress.

“We’re dealing with the leadership in both the House and the Senate on this issue from both the Democrat and Republican side. Definite progress has been made in the last two or three weeks,” Mr. Deasy has stated.

Mr. Deasy “declined to discuss the specifics of the negotiations” stated the Times, “but he said that officials have a “definite timeline in terms of what we would like to see happen.”

“From the beginning the Taoiseach and I believed that any immigration agreement would require a bilateral arrangement that would benefit both sets of citizens,” Deasy said.

Again from the Times report: “One outstanding question is the status of the undocumented Irish already living in the US. While in the first instance the E3 visa scheme is likely to apply to future flows of Irish people, sources have indicated that discussions are also under way about accommodating undocumented Irish citizens who may qualify.

“The news from Washington comes as the Irish Government on Tuesday approved a series of measures to deepen and enhance Irish-U.S. relations, specifically inviting more American politicians to visit Ireland.

“While the Taoiseach and Ministers have made 169 visits to the U.S. since 2012, visits by American politicians are rarer, and the Government will seek to invite more U.S. mayors, members of Congress and national politicians to Ireland in the coming years.

“Approving a review of U.S.-Ireland relations brought to Cabinet by Minister for Foreign Affairs Simon Coveney, the Government decided that there should be ‘aggressive engagement’ with Irish-American politicians in the new Congress.”

The requirement that jobs relating to qualifications, and jobs secured in advance, might be required of any who want to secure E-3 visas brings to mind not only H1B visas, but also the extended J1 visas which have a job in advance requirement.

Australian take up of E-3 visas has varied year by year though a source told the Echo that it lately has been about 6,500 a year and “growing.”

E-3 visas for the Irish certainly has bipartisan support in the Congress. The question is to what extent.

The Senate immigration reform bill passed by that chamber in 2013, the so-called “gang of eight” bill, included a provision for 10,500 E-3 visas specifically dedicated to the Irish that was penned by Senator Charles Schumer.

November7,2018

THERE COULD BE a new US visa available to Irish citizens that would allow them to live and work in the US.

A bill was introduced to Congress this week; it needs the support of both the House and the Senate to become law.

The two-year, renewable E3 work visas would come from the unused portion of the 10,500 E3 visas currently allotted to Australia, independent Senator Billy Lawless said.

Lawless and John Deasy the US Government Envoy have been working with Democrats and Republicans to ensure that there is bi-partisan support for the initiative.

In applying for an E3 visa, candidates must prove that they have a legitimate offer of employment in the US, and that they have the necessary academic or other qualifying credentials to fill the role.

“It is my ardent hope that in addition to creating future flow Irish immigration to the USA that many undocumented Irish will also qualify for this scheme,” said Lawless.

“We have seen disappointment in the past on immigration legislation, particularly in 2007 and 2013 when we came close, but I am cautiously optimistic in welcoming this new deal, given that the President, the Homeland Security Chief and the Speaker’s Office are pushing this bill forward during the lame duck session.”

The last time Ireland received a new visa allocation was in the early 1990’s under a scheme initiated by former Congressman, Bruce Morrison.

Meetings on Capitol Hill

This isn’t the first we’ve heard about this visa scheme, it just seems more likely now – especially with a Democrat majority in the House.

Answering questions in the Dáil in December 2015, Minister for Justice Charlie Flanagan said that the US bill came about after he and the Taoiseach Leo Varadkar met with members of congress on Capitol Hill.

“…In Washington at the end of September, I met key Democrat and Republican contacts on Capitol Hill, including Senator Patrick Leahy, Congressmen Joseph Kennedy III, Paul Ryan, James Sensenbrenner, Richard Neal and other members of the Congressional Friends of Ireland group.

Republican Jim Sensenbrenner and Democrat Richard Neal are the politicians who introduced the bill to Congress this week.

Following my meetings, a Bill was tabled by Congressman Jim Sensenbrenner in the US House of Representatives. The Bill is aimed at providing access to several thousand E3 visas for Irish citizens.

“I warmly welcome this positive step towards meeting the desire of many Irish people to live and work in the US for a time, but there is much work to be done in both Houses of Congress before this Bill might become law.

I am also aware that while this measure would advance our objective of securing improved legal migration channels, it would not address the concerns of the many undocumented citizens currently in the US.

“These remain a key priority and continue to be the subject of ongoing contacts with the US authorities,” Flanagan said.

October25,2018

Dear Editor: Despite all the political banter feeding the 24/7 media, Americans still like to look out for our neighbors. And that is on full display in a bill currently in Congress that has overwhelming bipartisan support on an issue that doesn’t seem to have much bipartisan agreement these days – health care.

The Access to Marketplace Insurance Act would ensure that no insurance company can deny coverage based on someone getting help with their premium from private charities. Now you wouldn’t think a bill like this is needed, but unfortunately some insurance companies are trying to kick sick people off their plans because they get help with their premium payments from some of the most important organizations in our country: nonprofit charities. But in a time when everything seems partisan, both parties are coming together to stop it.

The Access to Marketplace Insurance Act has the support of Republican Congressman Jim Sensenbrenner. It’s also supported by Democrats like Madison’s Congressman Mark Pocan. All told, the bill has over 110 Republican and over 60 Democrat co-sponsors.

We shouldn’t need a bill to protect charity premium help, but we do. Congress needs to pass this bill immediately because Americans care about our neighbors and this bill proves it.

October25,2018

Congressman Jim Sensenbrenner expressed skepticism that the illegal market will feel any pressure from the legal market.

Sara Slane of the American Gaming Association (AGA) responded to Sensenbrenner that there was clearly a need for the legal market to be competitive with the illegal market in order to convert bettors.

This is without question true. Sensenbrenner’s question/comment was based on the premise that most gamblers are ambivalent to whether a market is legal or illegal, something that is almost certainly untrue for most Americans.

Unfortunately, Slane doubled down on the statistic that 70 percent of people would move some money to the legal market (I detail the problem with this statement in part two).

There are advantages to the offshore market in that some of the features of betting in grey or black markets cannot be mirrored by the legal market because the social costs associated with the risks are too high. To assume that it is simply better to not create a legal market is an incredibly regressive view, not in touch with large segments of the population.

Underage gambling?

A follow-up comment from the committee asked about the children and how we can keep children from gambling.

Forgive my editorializing, but it appears that small-government Republicanism is dead. Keeping children off of gambling sites begins with responsible parenting. Obviously, there are age verifications that need to be implemented, but no system can stop a child who gains access to their parents log in information, or is allowed to wager on a parents account.

Indeed, a study of Adolescent Online Gambling in the UK showed that 10 percent of study participants had gained access with their parents’ permission (the study is available here).

The issue here is two-part; does prohibition stop children from accessing gambling sites? My response is: No. Second, is whether some regulation or checks is better than no regulation? My response is: Yes. I know it may be hard to find a good, reliable babysitter, but I would suggest that Congress is not the place to find one.

And age verification…

Rep. Bob Goodlatte enquired regarding age verification.

Les Bernal of Stop Predatory Gambling advocated for allowing small unlicensed gambling games, and claims that the issue with gambling is when the state puts the mark of legitimacy on the games by regulating and licensing them.

Jon Bruning of the Bruning Law Group relied on some headlines about underage gambling in the UK to argue that age verification protocols do not do adequately protect against underage access.

This is not a totally fair characterization. Age verification is not perfect. The UK currently does age verification as well as anybody, but stopping underage access begins at home with parents knowing what their children are doing online. The UK is also in a process of updating age verificationprocedures, an important aspect that often does not get discussed after regulations are passed.

There is a need for continued moderating and updating. Becky Harris of the Nevada Gaming Control Board detailed the procedure for registering to obtain access to online betting in the state, seeming to dispel with apocalyptic visions of several members on the panel who suggested that online legal wagering would result in widespread underage access to gambling.

What about the gambling laws already on the books?

Goodlatte inquired how do we get the Department of Justice to enforce the existing statutes against gambling companies.

Bruning and Bernal responded and expressed that this was their question as well. The Department of Justice has the ability to enforce federal law and they are also able to file both civil and criminal lawsuits against foreign actors. It is odd that a congressman chose to ask a witness about such enforcement procedures, when these are questions for the Attorney General.

Congressman Cedric Richmond of Louisiana stated: “when I go into a casino…far too often it appears that many of the people in there look like they should not be there.”

Richmond’s observations are obviously nothing more than anecdotal, potentially offensive, and are not based on statistical analysis. Bernal responded with an anecdote from Ireland that says 70 percent of Irish online gamblers went into debt to wager online, I have been unable to find a copy of this study.

Harris that it is quite difficult to wager with credit cards and because of that, in regulated markets like Nevada, there are barriers to accruing large amounts of debt.

Data security

Richmond then asked about personal data security.

Harris stated that she is unaware of any operators misusing data in Nevada; Bernal, however, elected to inform the committee that the gambling industry knows more about individuals than Google does. In one anecdotal story from Patrick Cain of Canada’s Global News, Cain requestedeverything Google knows about him. They sent him more than 20 gigabytes worth of data that is the equivalent of about 12 million pages of text.

Does the gambling industry know more than that about you? I do not know, but I have my doubts. The comment, however, sure made a good sound bite and one not likely to be questioned by Congress.

College sports

Rep. Martha Roby of Alabama inquired as to how college athletes can be protected from legal gambling.

One solution would be to pay them, but alternatively, Bernal suggested that legal gambling should be banned.

Unfortunately, there will always be a threat of match-fixing since the monster can never be totally eliminated, but threats can be reduced. Increasing costs for match-fixers is one potential avenue for deterrence, as long as college athletes remain unpaid workers in a multi-billion dollar industry, they will be potential targets for match-fixers.

It is likely that match-fixers would prefer to operate in illegal markets than legal markets, as illegal bookmakers are less likely to report suspicions to authorities because of their own exposure. For this reason, one of the best means to protect college athletes is to establish a robust legal market.

After the hearing…

The conclusion of the hearing left little indication of the direction that the House was interested in pursuing. More than anything, the hearing came across as a fact-finding mission, though the buckshot pattern of topics and interests left much ground to be covered before federal legislation becomes a realistic vision.

In addition to the verbal testimony, there were a series of filings. We have managed to track down several:

Americans for Tax Reform

Grover Norquist of the Americans for Tax Reform group urged: “There is no need for federal regulation in the area of sports betting.”

It is unclear if this is advocating for repeal of UIGEA and the Wire Act, or if the organization is simply referring to new legislation. In the second paragraph, Norquist incorrectly asserts that the Supreme Court’s decision in Murphy stood for the proposition that all 50 states must be treated the same.

While I have argued that this was a deficiency of PASPA, this (equal sovereignty) was not an issue that Justice Samuel Alito addressed in his decision.

Interestingly, the group also comes out against an integrity fee, however, it attributes the requests/demands for a fee as originating from the NFL, NHL and NCAA, instead of the two-most vocal advocates for the fee, the NBA and Major League Baseball.

National Conference of State Legislatures

The NCSL notes that PASPA “exemplified the failing of a one-size-fits-all federal solution to complex questions of policy.”

Much like the Norquist letter, there appears to be a misunderstanding as to what PASPA was. It was hardly a one-size-fits-all solution since a number of states were treated differently under the statute.

In the next sentence the NCSL refers to the “shackles of federal preemption being removed,” but again Congress was not preempting (something the Supreme Court said Congress could do); instead Congress was commandeering. Words matter, it is important that organizations use language accurately.

The NCSL letter argues that states should remain free to regulate sports betting as they choose.

Major County Sheriffs of America

The MCSA sent a letter to Sensenbrenner arguing that illegal sports gambling supports a number of other illegal activities including money laundering, extortion and drug trafficking.

The MCSA has also come out against integrity fees, noting that if integrity fees go to sports leagues, the money collected is not going back to help communities. This is an important point that the sports leagues have not been held to account for. If they receive a royalty, then that is money that is not going to community interventions, and the costs associated with the lost funds need to be covered by taxpayers.

The American Conservative Union

The ACU advocates for Congress to allow the states to make their own decisions regarding sports betting.

The ACU notes that state legislatures are in the best position to make decisions about allowing sports betting for their citizens. The ACU notes that a survey of Conservative Political Action Conference (CPAC) attendees found that more than 90 percent thought that the states, not the federal government, should be responsible for regulating sports betting.

It should be noted that a survey of CPAC attendees is not likely to be representative of a state’s population, as a key principal of conservative values is limited government with an emphasis on states’ rights.

National Fraternal Order of Police

The FOP weighed in, noting that it is a member of the American Sports Betting Coalition and that the black market operates outside the reach of law enforcement and that illegal betting fuels other illegal activities. FOP thus advocates that legalization is in the best interest of public safety.

The FOP argues that sports betting regulation should be left to the states, and “federal law enforcement should focus on the pursuit of criminals and their organizations beyond the jurisdiction of State and local law enforcement.”

Indeed, this has been the impetus for many of the federal sports betting regulations.

Consumer Action for a Strong Economy

CASE argues that consumers and taxpayers are the real winners because of the “many millions of dollars more in tax revenues, which relieves the pressure of politicians to raise taxes.”

While there will be some money for states, but sports betting is not going to see the government sending us sports betting dividends because they cannot spend all the money coming in. This narrative is unhelpful.

CASE also praised the Supreme Court for “their judicious ruling.” The Supreme Court’s job is to interpret laws. They are theoretically impartial. CASE does make an important point that unreasonable taxation threatens to suffocate the legal industry.

The organization also advocates for private partnerships like those between the NBA and MGM, while calling integrity fees a “laughable prospect.”

Citizens Against Government Waste

CAGW noted that PASPA was an anomaly and that gaming regulation has historically been left to states and localities. CAGW observed that Congressional intervention at this point would throw the nascent state-level industries into disarray.

CAGW appears to have a lot of faith in the efficiency of the market to ensure that best practices emerge.

Once again CAGW comes out in opposition to integrity fees. The CAGW statement is quite similar in scope to that of CASE.

Michelle Minton – Competitive Enterprise Institute

Minton’s testimony advocates for state regulation of sports betting, noting that states are best positioned to pass laws reflecting the morality of their citizens.

Minton notes that outside of Hawaii and Utah nearly all states have experimented with some forms of gambling policy liberalization.

Minton argues that the European market, which is regulated, has limited their vulnerability to corruption and this has “allowed them to successfully address match-fixing.” I think this is true for some countries in Europe, but I would argue there are regulated markets in Europe that are doing an inadequate job of preventing corruption of betting markets.

Minton argues that competition is necessary to shrink the illegal market. This is invariably true, though I would argue that as a country, the cited potential for $16 to $40 billion in economic output are not short-term outcomes.

In summary, Minton’s testimony largely advocates for minimal intervention in the betting market, and recommends that the regulation emerge from states as opposed to federal lawmakers.

Poker Alliance

The Poker Alliance (formerly the Poker Players Alliance) filed a statement for the House record. Again, another organization has taken an expansive view of Alito’s ruling, stating: “the Court held that PASPA violated the 10th Amendment’s “anti-commandeering” principle, which provides that if the Constitution does not give power to the federal government or take power away from the states, that power is reserved for the states or the people themselves.”

This seemingly downplays the fact that Alito stated (accurately) that Congress could preempt state regulations and ban sports betting, but they did not in the case of New Jersey. The Alliance claims that nearly 80 [percent] of wagering is done over the internet, which is certainly an interesting statistic that I have not previously seen, but would seem to suggest the importance of offering mobile betting, if the desire is to convert bettors from the black market to the legal market.

That’s a lot of opposition

The big takeaway from the hearing and the statements of witnesses and non-witnesses is that Congress faces significant opposition if it intends to usurp state-level regulation of sports betting.

With that said, I think we are a long way away from Congress taking a serious stab at usurping the state-level regulation of sports betting. This would not only be unpopular with public opinion according to some circulating polls, but would seem to fly in the face of what many conservative groups are advocating for.

Given that Republicans still control both houses of Congress and the Oval Office, I would expect these powerful conservative voices to be heard.

October18,2018

The prospect of Illinois lawmakers passing a comprehensive gaming expansion package got a shot in the arm on Wednesday following a joint hearing in the state House of Representatives. Two subcommittees met to discuss a bill that has been kicking around the statehouse for almost two years.

SB 7 began its life as a Chicago casino bill back in January 2017. The proposal went on to morph into an omnibus gaming expansion package under amendments from Rep. Robert Rita, with online gambling, sports betting and daily fantasy sports added to the mix.

Deciphering legislative hearings

“I think the one thing that all of you agree on is that for Congress to do nothing is the worst possible alternative.

“So this means we have some work to do. And I’m looking forward to working with you to try to come up with something both short-term and something more permanent to deal with this issue. Because I’m afraid if we don’t, there are going to be some people that get hurt — and hurt very badly.”

Like the highly refined witness testimony, though, it was nothing more than standard hearing-speak. As I noted on Twitter, if you want to know how far long along a legislative body is on an issue, pay attention to the types of questions it asks.

Yesterday’s hearing featured lawmakers asking many of the right questions to move forward. For the most part, the discussions were

Precise, demonstrating a solid understanding of the topic

Focused on the best practices and policies, rather than theoretical viability

An omnibus bill may garner the most support

Wednesday’s lengthy hearing was probably a little frustrating if you’re an online poker or online casino advocate, as neither topic got much time. One could see that as a good sign, however.

As Rep. Lou Lang said in his opening remarks, online gaming and DFS are already pretty well vetted in Illinois. The inclusion of these two issues coupled with the general apathy adds fuel to the speculation that they’re mostly wrapped up. Sports betting is the issue the legislature really needs to get up to speed on.

Another positive sign for online gaming supporters were the several remarks from witnesses and legislators about keeping all forms of expansion intertwined in a single piece of legislation. As Pala Interactive CEO Jim Ryan told the committees, sports betting will account for 50 percent of online gaming revenue, so, “just legislating sports betting is doing half the job.”

Furthermore, the same type of omnibus approach allowed Pennsylvania to pass a comprehensive gaming reform package last year, and it could be the secret sauce that garners enough legislative momentum — and votes — in Illinois.

The more industries and businesses that would benefit from the bill, the more decision-makers will hop on board. And if their support of one issue outweighs their reservations about another, lawmakers may be more likely to cast their vote for an omnibus expansion.

October11,2018

Americans from coast to coast enjoy purchasing goods on the internet. It’s comfortable, convenient, and the product is delivered right to your doorstep. Online shopping makes it possible for people to buy products from states on the other side of the country and, in many cases, to buy unique or difficult-to-find items.

This boom in online shopping has brought tremendous benefits to consumers but also created tremendous opportunities for small businesses. This trend has created countless small sellers across the nation leading to the creation of jobs and wealth.

This exciting trend faces a potential hurdle after a Supreme Court ruling this summer. The case (South Dakota v. Wayfair) overturned a decades-old precedent in Quill Corp v. North Dakota. Specifically, the decision struck down the “physical presence” standard, which stipulated that out-of-state sellers, referred to as remote sellers, were not required to collect sales tax for states where they did not have a physical presence.

Under the previous standard, a small seller in one state is not required to collect and figure out the sales tax for an item bought from a consumer in another state where the seller has no presence. Large corporations may easily be able to comply with these burdens, but it may be impossible for small businesses.

With over 10,000 different tax jurisdictions across the nation, the burden for small businesses would be crushing. This will create enormous costs for companies that have to navigate complex tax laws. Small sellers may need to pay accountants and lawyers to help them comply with these thousands of laws and may open themselves up to potential audits and other state regulations.

The Wayfair decision has left many businesses in limbo wondering what the impact will be, not knowing if there will be generous thresholds for small business before they have to collect or if they will have to collect retroactive taxes.

Thankfully, representatives in Congress have recognized the problems created by the Supreme Court decision. Rep. Jim Sensenbrenner (R-Wisc.), along with a group of bipartisan lawmakers, have introduced a bill to fight the taxation tidal wave. The bill, the Online Sales Simplicity and Small Business Relief Act, would slow down implementation and clarify interstate taxes on remote sales.

Provisions in the bill include a ban on retroactive taxes, which would bar states from taxing any sales from remote sellers prior to June 21, 2018, the date the Court handed down Wayfair. The bill also establishes a phase-in period of compliance, preventing states from collecting taxes until Jan. 1, 2019.

Additionally, the bill would provide small businesses with some breathing room. It allows a generous $10 million exemption for small businesses, meaning any seller that generates less than $10 million in sales a year would not be affected by online sales taxes. The provision remains in place until the states can create a compact to be approved by Congress where such a waiver is unnecessary.

As the National Taxpayers Union argued in endorsing the Sensenbrenner bill, “Absent congressional action, billions of dollars in interstate commerce and millions of small businesspeople face the threat of back-tax bills, complicated collection obligations, and nationwide tax and audit responsibilities simply for having the temerity to use the internet to reach buyers.”

The Supreme Court made a mistake in overturning its physical presence precedent, but Congress has the opportunity to alleviate some of the uncertainty that has been unleashed by the decision. The Online Sales Simplicity and Small Business Relief Act is an important step towards protecting small businesses and taxpayers.

Ken Blackwell is a former domestic policy adviser to the Trump/Pence transition operation. He has served as state treasurer and secretary of State of Ohio, as well as mayor of Cincinnati.